Just found out I own mineral rights
Just found out I own mineral rights
Did you just find out you own some mineral rights? If so, you’re in the right place. You will quickly discover that mineral rights ownership can be a complicated matter that takes up a lot of time to figure out. We can help you understand the basic information you need to know about mineral rights ownership from start to finish. Consider this your free guide to mineral rights ownership!
Mineral Owner Documentation
There are generally three ways that mineral owners find out they own mineral rights. Below is an explanation of the three most common ways and what you should do next in each situation.
Letters in the Mail: Did you get an offer letter in the mail stating you own mineral rights? Cool!!! Not so fast unfortunately. While it’s great that you own mineral rights, you could be especially careful of offers that come in the mail. These offers very rarely represent a true marker value for mineral rights in Texas. In addition, if this is the only documentation you have regarding your mineral rights, you don’t even know for sure what you own. The other issue at hand is that there is no 100% guarantee that you own the mineral rights. It could have been an error on the part of the person sending the letter and these letters often contain misinformation about how much you own and where. Your best bet is to head to the court house and get a copy of your deed which will show exactly what you own. You could hire a landman to run a title search, but that’s usually expensive ($1,000+) and generally not worth it as an owner.
Inheritance: Unfortunately, many people become mineral owners because someone in the family passed away. There are two key things you need to do in this situation.
1. Complete Probate: You need to have probate completed 100% on the property. You don’t technically own the mineral rights until probate has been completed. You also may not be entitled to as much ownership as you originally thought. You need to determine how much ownership the original relative had and also how much of that ownership is transferred to you.
2. Gather Documentation: The previous owner has hopefully kept some documentation related to their mineral rights. You should do your best to gather as much of this information as possible. (Important documentation listed below)
Approached to Lease/Sell: Another common way that mineral owners find out they own the property is they are approached to lease or sell the property. If you are approached by a large operator (companies who drill for oil and gas), then there is a very high likelihood you own the mineral rights. You should carefully consider all of your options and don’t sign anything until you are ready! Some people are approached to sell mineral rights door to door. Be very careful here as it’s unlikely you’ll get the best deal with a local broker.
Listed below are some of the important documents that help establish your ownership:
- Mineral Deed
- Lease Agreement
- Probate Documents
- Title Search
- Royalty Check Stubs
- Division Orders
If you find any of these documents, hold onto them!
Value of Mineral Rights
The next question we commonly get from people who just found out they own mineral rights is about the value. I have mineral rights, so how much are they worth?!? The short answer is that your mineral rights could be worth between $250/acre to $2,500+/acre. It all depends on which state and county you are located in. Certain counties could easily be worth over $5,000/acre while others are nearly worthless. There are a number of things that affect the value which is why it changes so much. Even within the same county you don’t know for sure what the value is at all times.
If you own producing mineral rights where you are getting monthly royalty checks, you can estimate the value more easily. Simply enter the average amount you receive each month into the first box below.
It’s important to note that mineral rights value is more difficult to estimate that a home or car value. In the housing and stock market, you have thousands of transactions taking place every day (or second!) that tell you about the value. With mineral rights, you have far less information about how much the value is. The only way to know for sure how much your mineral rights are worth is to put them up for sale and see what the market will pay for them.
How to Sell Mineral Rights
If you want to sell mineral rights, you want to make sure you get paid the highest possible value for selling them. The best way to do this is by getting that property in front of a large number of prospective buyers. Why does that matter? Since there’s not a lot of information available about the value, you need to let multiple buyers compete to pay you the highest price. This is the only way to ensure that you get the highest value for your property.
We recommend that you sell mineral rights with US Mineral Exchange. Why? The reason we recommend them is that they are like the MLS of mineral rights. When you list your property on their website, they will get your property in front of a large audience of qualified buyers. When buyers are all working against one another to pay you the highest price, this will put a lot more money in your pocket!
Questions about owning mineral rights?
If you have more questions about owning mineral rights, fill out the form below. We’ve got years of experience in oil and gas and we’re happy to help!